Hidden behind the Fed’s flip-flop theatrics about raising rates.

A decade after the first cracks of the Financial Crisis appeared – and six years since the Dodd-Frank law was enacted to prevent another Financial Crisis and to pave the way for resolving too-big-to-fail banks when they fail – Goldman Sachs, Morgan Stanley, JPMorgan, and “some other banks” are still trying to delay implementation of the new rules.

These banks are asking the Fed to grant them an additional grace period of five years to comply with the so-called Volcker rule, “people familiar with the matter” told Reuters.

The Volcker rule is one of the key elements in the massive and loopholey Dodd-Frank Act that is supposed to, among other things, limit the risk-taking associated with proprietary trading, in-house hedge funds, investments in external funds, and the like. The Volcker rule attempts to get banks out of the business of blowing their own capital on huge risky bets.

Among the many loopholes are exemptions for merchant banking and foreign exchange trading. The law also allows banks to ask for a five-year extension in selling what they deem to be their “illiquid” assets that they have to sell under the Volcker rule.

The Fed already granted the banks three one-year extensions – the last one in July. So now the deadline is July 2017. These three one-year extensions, the maximum provided for in the law, were for compliance with a broader set of rules concerning selling investments in hedge funds and private equity funds. If the Fed grants this five-year extension, it would allow the banks to drag this out through July 2022, by which time everyone will have forgotten about it, mercifully.

The banks that are asking for these extensions are the same ones that were bailed out by the Fed with nearly free loans that were so large that they reduced the Treasury’s TARP bailouts to peanuts. These are the banks that then benefited from the Fed’s QE and zero-interest-rate policy by furiously trading with these funds to where they paid record bonuses in 2009, the very year in which they were bailed out.

As a result of the Financial Crisis, the Fed, which allowed and even encouraged the shenanigans that led to the Financial Crisis, has assumed even more powers as regulator of these banks.

It’s been so long we’ve almost forgotten, distracted by the Fed’s two-year flip-flop theatrics about raising interest rates.

The Fed has asked the banks to supply additional information on the specific funds and their underlying assets to prove that they actually meet the statutory criteria of “illiquid,” the sources told Reuters. The Fed also wants to know how long it would take to unload these investments and what it would take to unload them more quickly.

The mouthpiece for this push is the Securities Industry and Financial Markets Association (SIFMA), a lobbying organization that represents broker-dealers, banks, and asset managers. “The voice of the nation’s securities industry,” it says on its website.

“SIFMA is working with our members to ensure that regulators have the data they need to adequately appraise the situation,” it told Reuters, adding that Congress intended to provide “an appropriate transition period” to exit illiquid funds without disrupting markets.

An “appropriate transition period” of 12 years?

And disrupting the markets? These big sophisticated banks already had six years to sell these investments. The stock market has doubled during that time. Bonds have skyrocketed. Residential real estate has soared. Commercial real estate has formed a historic bubble. Other assets too have soared, all part of the Fed’s Wealth Effect. Now banks are asking for another five years, from 2017 through July 2022?

But here’s the problem: banks aren’t trying to dump these “illiquid” assets overnight. They want 12 years to do it! Granted, some of these assets may have contractual limits as to selling them. But assets are only “illiquid” when you try to sell them and you can’t get what you must get for them. Drop the price enough, and suddenly these assets get very liquid.

It wouldn’t be a “fire sale”; they had years to do this! But it would be a reality check.

And this might be the problem: banks already sold a big part of the assets that don’t comply with the Volcker rule – the ones they could sell profitably in the asset price bubble the Fed created for just that purpose. But it appears they’re still not in a profitable position in these remaining assets. And now they need another Fed-engineered miracle, but they fear that miracles might take more time these days – hence five more years. And given what the Fed has already done for them, surely, it can figure out a way to make its clients happy.